I understand that once a property is listed, the competition grows, and the pool of people with awareness of the offering increases... but this one just went live, fits all his criteria: the price, the CAP rate, the potential upside, the cash on cash, it all fits. But he's ambivalent because it hit the open market last week.
I'm fairly new to commercial properties selling in the millions, so I'm deferring to you, Bigger Pockets! What's the deal?
"his criteria"...who is the buyer, you?
No, I'm not the buyer. I'd totally buy this property - it's a 15% CAP pulling in nearly $775,000 a year, net - and the upside could add nearly a third to it, with proper oversight and development. If I had the money I'd have closed the day I finished due diligence. Alas, I am not a multimillionaire. Yet.
So who is 'he'? The agent? What criteria does an agent have? They normally seek their client's criteria and look for property based on that. To answer your heading question, agents love pocket listings because they get both sides of the commission. Same work, twice the money. Just my experience.
The 'he' is the agent, yes. The criteria is pretty simple: 4-6MM, 10% CAP or higher, 11% cash on cash, 25% down payment. Mine delivers all of that, at a higher CAP, with the potential to add another 30% to the bottom line by continuing development.
It would be a big payday if he got both sides, I suppose. I didn't think of it on those terms. Makes sense, though. We're all in the game to make some cash.
Yes, he is definitely looking to make more money. I am a Realtor, and although it is nice to make more money from a single transaction, our duty is to fully represent buyers to the best of our abilities, which means showing them any and everything that meets their criteria. If I were you, I would insist on seeing the property or look for another Realtor who will put your interests first.
I'm guessing Johnny is a wholesaler, trying to peddle a listed property, and the "buyer's agent" doesn't believe Johnny's numbers, as opposed to only wanting to see pocket listings.
Partly true - I am playing middle man and looking to get an admin fee, but the numbers are verifiable. It's not a question of believing me, it's all in the 2014 P&L statement... and he has access to the Seller of Record, so he'd be able to ask anything he wanted on a conference call. If I'd lied about anything I'd be looking mighty foolish!
In this scenario, since it seems the primary cause of concern rests on my shoulders, how would you fine folks present the deal? It's really a fantastic property, and it'd be a shame to swing and miss with it.
thanks Wayne was trying to figure out the question ?
Maybe some commercial guys can jump in but its my experience ( albeit limited ) that commercial agents work in this manner
1. they get a listing and they ALWAYS try to double end it to their buyers FIRST
2. if they can't sell it they open it up to their office.
3. if the office can't sell it they then put it out on loopnet coaststar or in rare instances MLS
Commercial brokers do not work under the same code of Ethics and rules RESI agents work under.. And you better have you commission in WRITING they will cut you out in a heart beat if you don't and not think anything of it...:)
Lastly deals over 10 million are rare to be sold Co brok
That's really good to know, thanks! Like I said, I'm fairly new at bird dogging for people at this end of the spectrum - my bread and butter is multifamily properties between 2-4 units and SFRs, so the rules of engagement are totally different. Thanks for your input!
Commerical RE brokers are a completely different animal than SFR brokers.. They will not give you the time of day.. You need to walk in at the first meeting and if you are not an obvious player you will need POF that is real not from some service or wanna be HML ..
good catch I was confused...
Looks like I phrased my question badly! Apologies all around. The agent is representing a buyer that needs to do a 1031 exchange in a fairly short amount of time - so he's literally the buyer's agent.
In any case, he was having some trouble locating a property that covered all the needs of the client, and he reached out to his professional network to assist him in bringing some things into the pipeline for the buyer to have a look at.
I responded with the listing, and it's killer! Annnnnnd he doesn't want it because it isn't a pocket listing, in spite of the fact that it gives him everything he said he needed for a deal to get done. That's my quandary.
Ok that's a little clearer... Agent must think he will find something he can double end.
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